Times are tough for April Novelties. If it engages in a new, one-time promotional campaign costing $100 million, its annual aftertax cash flow over the next five years will be only $1 million. If it does not undertake the campaign, it expects its aftertax cash flow to be minus $30 million annually for the same period. Assuming the company has decided to stay in the novelty business, is this campaign worthwhile when the discount rate is 10 percent? Why or why not?

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